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The State of Mobility

For advanced transportation technology, California is leading the way.

The futuristic, all-electric FF 91 remains a work in progress.

Photo courtesy of Faraday Future

by GARY DAUGHTERS

When Shenzhen, China-based BYD went shopping for a U.S. manufacturing location, it followed the lead of other top players in the next-generation vehicle space. It went to Los Angeles County, California. That was back in 2010. Today, BYD, which stands for "Build Your Dreams," is churning out 1,500 electric buses a year and employing some 800 workers at its newly expanded plant in Lancaster.

Bolstered by a talent pool with roots in the aerospace industry and propelled by public policies and market demand, southern California's electric vehicle industry is driving innovation and creating much-needed manufacturing jobs.

With its North American headquarters in Los Angeles, China-based BYD is churning out electric buses from a factory in Lancaster, California.

Photo courtesy of BYD

"Electric vehicle companies are popping up continually in the region," says Judy Kruger, director of aerospace and advanced transportation for the Los Angeles Economic Development Corporation (LAEDC). "It's because of market share and it's also because L.A. is a hub of innovation with the talent to support it."

The Los Angeles area leads the nation in sales of electric vehicles. According to a report released in May by the International Council on Clean Transportation, the Los Angeles metropolitan area accounted for more than 143,000 electric vehicle sales from 2010 through 2017. L.A. had new electric vehicle sales of nearly 12,000 during 2017, more than twice as many as second-place San Jose.

Tesla has found a home in southern California, as have Lucid Motors, Fisker Automotive, Faraday Future, Karma and Evelozcity. BYD is one of at least six electric bus makers that call the region home. Others include Proterra, Ebus, U.S. Hybrid Corporation, New Flyer Industries and Executive Coach Builders.

"We're very excited about the electric bus manufacturers that are cropping up in the region," says Kruger. "You won't find another cluster like this in the U.S."

Asked why BYD chose to locate in Lancaster, with headquarters in downtown Los Angeles, the company's vice president for North American operations, Patrick Duan, ticks off a list of factors.

"Millions of people live here, so mobility and transportation is a huge thing," says Duan. "On top of that, L.A. City and the State of California have pioneered in promoting zero-emission technologies in terms of transportation. Los Angeles has a mission to promote cleaner technology and more efficient transportation.

"Logistically," says Duan, "L.A. County has two major ports, the Port of L.A. and the Port of Long Beach, and being in the business of manufacturing electric transportation vehicles, we import a lot of components globally. The convenience aspect is very important to us.

"Lastly," he says, "L.A. has a huge pool of talent for all kinds of gifted, experienced employees. In Lancaster, we were able to find hundreds of talented workers. Even if they don't have exactly the experience with electric vehicle technologies, the talent level is such that we can hire them and train them with their fundamental experience. That's been very successful."

The Los Angeles County Metropolitan Transportation Authority has set a target of converting its entire 2,200-bus fleet to electric propulsion by 2030 and has signed a contract with BYD to build 60 buses with an option to build 40 more. The company also has a $79-million contract for up to 85 buses with the suburban Antelope Valley Transit Authority, which has a goal of becoming the nation's first fully electric fleet by the end of this year. A state grant of more than $24 million is helping to fund the purchase. BYD also has sold buses to Long Beach Transit, UCLA, Stanford University, Facebook, "and to a lot of other transit agencies and airports around the country," says Duan.

Last October, BYD, whose largest investor is Warren Buffett's Berkshire Hathaway, Inc., completed an expansion that quadrupled the size of its Lancaster plant to 450,000 sq. ft. (41,806 sq. m.) and allowed it to nearly double the size of its workforce.

“I don’t think there’s such a thing as a production paradise. California’s the right place for us because this is where our customers will be.”

"The city of Lancaster and the city of L.A. have been very supportive of us," Duan says. "Without their support and very fast reaction to our requests, we wouldn't have been able to do this expansion. Lancaster has been very supportive in helping us find talent, and they've also connected us with Antelope Valley Community College, which has programs that we've used for training our employees, especially production staff.

"Two years ago we were at 200 employees," says Duan. "Today we're at 800, and we're on a curve bending up. We're ramping up pretty quickly."

Faraday Future Turns a Corner

Four and a half years since the company's founding by Chinese billionaire Jia Yeuting, Los Angeles-based Faraday Future is moving toward production of a real automobile. In a late August interview with Site Selection, Dag Reckhorn, the electric car company's senior vice president of global manufacturing, said FF's plant inside a former tire factory in Hanford, California, was close to completing its first test model of the long-awaited FF 91.

"It's a big milestone," said Reckhorn.

The company's goal of bringing a car to market by the end of the year appears to have gone by the wayside, with officials saying the FF 91 will "probably" be available for purchase next year. Reckhorn says buildout of the Hanford plant, begun early this year, is likely to be completed in the second quarter of 2019.

"We have finalized the whole pre-production area," says Reckhorn. "We've installed electricity and plumbing and gotten the necessary permits, including the conditional certificate of occupancy. The plant had been closed since 2000, so nothing was up to modern standards. It's been a huge endeavor and we're proud of the fact that we pretty much hit the timing."

The fortunes of Faraday Future have brightened from a year ago, when the fledging company appeared to be on life support, having terminated work on a $5-billion production facility in North Las Vegas, Nevada, in favor of launching operations from the abandoned Pirelli plant in California's San Joaquin Valley. The company posted a 2017 net loss of $339.6 million amid executive departures, lawsuits, desperate fundraising efforts and reports of sunken morale. Staggering losses incurred by FF's Chinese parent company, LeEco Group, placed Jia on a list of debt defaulters by the Chinese government and led to a government-directed freeze on his assets.

Photo: Getty Images

Key to the company's rebound was a $2 billion investment by Hong Kong-based Evergande Health, which also assumed a 45-percent ownership stake, with Jia being named as CEO.

"Have we turned around? Yes, we definitely have," says company spokesman John Schilling. "Not only with the funding, but the FF 91 is on track and we've taken a positive direction in terms of hiring. We have momentum, including with the building of the Hanford facility."

Full-time staff at the 1-million-sq.-ft. (92,903-sq.-m.) plant now includes some 60 production workers, says Reckhorn, with plans to be at 200 by the end of the year. Sequoia Community College in nearby Visalia is providing initial training.

"The area around Hanford is huge," says Reckhorn. "The San Joaquin Valley has a workforce of two million people, so we haven't had any issue finding people. We will hire up to 1,300 people when we're fully ramped up. That's probably not this year and probably not next year but the year after that."

Reckhorn says FF 91 bodies are being built and painted in Michigan, then shipped to Hanford for assembly. By setting up shop in California, Faraday Future is bucking a trend of manufacturers seeking out states where land and labor costs are lower and regulations less invasive.

“We’re ramping up pretty quickly.”

—JPatrick Duan, Vice President, Operations, North America, BYD

"If you're counting every penny," says Reckhorn, "then you might find places that are more suitable, but then you find other issues. I don't think there's such a thing as a production paradise. California's the right place for us because this is where our customers will be."

First unveiled at the 2017 Consumer Electronics show in Las Vegas, the futuristic FF 91 will come with a 1,050 horsepower engine that propels it from zero-to-60 mph in 2.39 seconds, quicker than the fastest Tesla. Its 130-kwh battery pack allows a range of 378 miles on a single charge. The company says a driverless valet parking feature will enable the car to park itself after the driver has already exited. Company officials decline to specify a cost, but reports have put it in the six figures. Reckhorn says to expect an announcement on that later this year.

Testing the Cars of Tomorrow

GoMentum’s “mini-city,” set among former barracks, features intersections, stop signs, obstructed views, sidewalks and signal lights.

The nation’s largest secure test facility for autonomous and connected vehicles technology sits on 5,000 acres at the World War II-era Concord Naval Weapons Station in Contra Costa County, California. Created in 2014, GoMentum Station is the brainchild of Randell Iwasaki, executive director of the Contra Costa Transportation Authority, which runs the facility.

Iwasaki hit upon the idea after a county official asked him think about ways to convert the former base in a way that would generate jobs.

“As soon as I got out there,” Iwasaki tells Site Selection, “I thought it would be an amazing test facility. There’s a golden opportunity for a test bed here. With all the car companies down in San Francisco and Silicon Valley, wow, what an opportunity to attract some smart jobs to our county.”

Located just 30 miles from the Bay Area, the former weapons depot has been transformed to test self-driving vehicles and connected vehicles — those fitted with devices that enable them to communicate wirelessly with other vehicles and infrastructure.

GoMentum has 20 miles of paved roads complete with tunnels, bridges, overcrossings and train tracks that allow for testing in a realistic environment without the real-life dangers of traffic and pedestrians. The decades-old roads are curvy and cracked, just like out in the real world. There’s a seven-mile stretch for high-speed testing and a “mini-city” among the former barracks with intersections, stop signs, obstructed views, sidewalks and signal lights.

“You can run multiple intersections with vehicles running in tandem in a circuit and test whatever feature you want,” says Iwasaki. “And you can test those over and over again in a controlled environment.

A “pedestrian” crosses in front of a test vehicle at GoMentum.

Source: Contra Costa Transportation Authority

“Honda,” says Iwasaki, “has been testing the vehicle-to-infrastructure interface using a camera to see the red, yellow and green lights at a temporary signal. Lyft has said this is one of the most efficient ways to test, in a controlled environment situation where you can do repeated tests and not disrupt anybody’s neighborhoods or the commute patterns. Then, when you’re ready for testing in a real environment, you go ahead and run the test that you’ve already run 1,000 times.”

Honda was the first carmaker to enter an agreement to use GoMentum. In addition to Lyft, other partners include Baidu, Toyota Research Institute, Uber, SAIC, Intelligent Transportation Systems of Japan and Canada’s ELIX Wireless Charging Systems.

GoMentum currently has a license to test on 2,100 of the former base’s 5,000 acres (2,023 hectares). The city and county have long-term plans to redevelop much of the site with housing, offices, parkland and possibly a college or technology training center. Iwasaki hopes GoMentum will become a magnet for quality jobs.

“As soon as I got out there, I thought it would be an amazing test facility.”

“There are a lot of smart people in Contra Costa County that commute every day to San Francisco to the tech jobs or go down to Silicon Valley to those tech jobs,” he says. “We’re looking at creating some smart jobs here in Contra Costa County to where people don’t have to drive as far, and that’ll have an impact on the local economy.

“When a car manufacturer starts doing research here in this area, then the companies that support them — the antenna, LIDAR and radar manufacturers, the cameras — are going to gravitate toward supporting that industry. Concord is a great place to try to start to grow this industry.”

— Gary Daughters

New Players in Mountain View

Kodiak Robotics co-founders Don Burnette and Paz Eschel

Photo courtesy of Kodiak Robotics

Just days after Uber shelved its plans to develop an autonomous truck, a new industry entrant emerged with a bang in Mountain View, California. Kodiak Robotics announced August 7 that it had raised $40 million in Series A financing led by global investment firm Battery Ventures. Founded by Don Burnette, previously a co-founder of the self-driving trucking company Otto, and Paz Eschel, a former venture capitalist, Kodiak Robotics aims to alleviate strain on the freight market through self-driving technology.

The American Trucking Association (ATA) reports that trucks haul more than 70 percent of all U.S. freight and generate over $700 billion in annual revenue. But with freight volume at record levels, driven largely by the growth of e-commerce, the trucking industry faces a crippling shortage of long-haul drivers — 51,000 at the end of last year, according to the ATA.

“This financing, coming just three months after founding Kodiak Robotics, is a huge validation for our vision,” Burnette said. “We believe self-driving trucks will likely be the first autonomous vehicles to support a viable business model, and we are proud to have the support of such high-profile investors to help us execute our plan.”

San Francisco-based Uber announced it would shutter its self-driving truck program on July 31. Uber, which had purchased Otto in 2016, said that ending the program will help it focus on developing self-driving cars. Uber’s self-driving car program was suspended in March after a pedestrian in Tempe, Arizona, was struck and killed by one of Uber’s driverless vehicles.

— Gary Daughters

Gary Daughters
Senior Editor

Gary Daughters is a Peabody Award winning journalist who began with Site Selection in 2016. Gary has worked as a writer and producer for CNN covering US politics and international affairs. His work has included lengthy stints in Washington, DC and western Europe. Gary is a 1981 graduate of the University of Georgia, where he majored in Journalism and Mass Communications. He lives in Atlanta with his teenage daughter, and in his spare time plays guitar, teaches golf and mentors young people.